Bay bosses 'surpass' 50c rise

Employers and Manufacturers Association chief executive Kim Campbell said the change would make a big difference for people at the bottom end of the pay scale.

A rise in the minimum wage will benefit the region's lowest income workers, particularly those in low skilled industries like fruit picking, hospitality or retail, the Tauranga Chamber of Commerce says.

But the chamber's acting chief executive Anne Pankhurst says some local businesses have "long since surpassed" paying minimum wages to their employees.

Her comments follow Prime Minister John Key's announcement on Monday that the minimum wage would rise by 50c an hour to $14.25 from April 1.

The "starting out" and "training" minimum wages - for youth workers and workers on industry training - will also increase 40c an hour to $11.40.

Mr Key said there was a balance between raising the minimum wage and putting jobs at risk, but he believed the 50c rise would have a negligible effect on the general availability of jobs.

The increase would affect about 109,000 people - the 54,000 on the minimum wage, and about 55,000 others now earning an amount between the current and new minimum wage, he said.

According to Statistics New Zealand, 10,800 people in the Bay of Plenty earn between $13.25 and $14.25 an hour.

Ms Pankhurst said the 50c increase would have the biggest impact for workers in low skilled industries such as fruit picking, hospitality or retail.

"I'm sure it will add to everyone's well-being at some level and I think the increase is not that large that it will impact adversely on businesses."

And while the pay rise would benefit lowest paid workers, a cautious rise was best for a recovering economy, she said.

"The [business] optimism is at the beginning of the upward curve, it's not in the middle or at the top," said Ms Pankhurst.

"We've got to be mindful that ... some people are coming right but not everyone is yet."

Employers and Manufacturers Association chief executive Kim Campbell said for people at the bottom end of the pay scale, even small amounts of $20 extra a week to their take-home pay could make a big difference.

Other "safety net" measures were available for low-income earners such as taxpayer-funded Working For Families payments and tax credits.

"You have to see the minimum wage for people who are struggling in the context of a greater welfare set up - and it keeps getting forgotten in the discussion."

Most employers would be able to handle the increase because it was a manageable rate, but anything higher could have been a struggle for sectors such as hospitality.

Mr Campbell said many employers would be able to pay more than the minimum wage, which was only designed to stop employees being exploited.

Living wage campaigners, who believed $18.80 an hour was the bare minimum needed to support a small family, have called the increase a step in the right direction.

However, Labour said the increase was not enough for low income earners, and promised to lift it to $15 within 100 days of taking power and lift it again within nine months. APNZ, additional reporting Adam Bennett